Brick and mortar stores try to adapt digital world

Imagine walking into a store and getting a message on your phone that your favorite brand of socks is on sale. Or, while you are looking at coffee makers, a quiz pops up on your phone that helps you decide which one to buy.

Retailers have the technology to send those messages now. What they haven't figured out is what kinds of messages consumers welcome, and which ones they find annoying.

"When you start looking at what this technology is, it's not the physical device [that alerts your phone], it is how do you manage that communication for the long term,'' said Aaron Mittman, chief executive of Sonic Notify, one of the speakers Monday at a conference on trends in digital media.

The conference, hosted by the Retail Marketing Society and the Center for Professional Studies at the Fashion Institute of Technology and held at the FIT campus in Manhattan, drew retail professionals interested in learning more about digital marketing, mobile-device payment systems and beacon technology that can enable stores to send customized messages to shoppers.

Beacon technology began making news about a year ago when Apple added iBeacon — a location-based awareness enhancement — to its operating system update. It's the technology that lets an Apple store send a "welcome" message when you walk in carrying an iPhone. It also allows other retailers to use that technology to communicate with an iPhone.

A number of technology companies have begun marketing devices to use beacon technology to connect with consumers. Major League Baseball announced in March that some 20 ballparks would be using beacon technology to notify fans that they can use their phones to upgrade to better seats.

Sonic Notify in March began using beacon technology with the Golden State Warriors professional basketball team. The location technology recognizes when fans have arrived at the nosebleed seats at the arena and asks them if they would like to buy better seats. Fans opt in to receive the messages when they download the Warriors mobile app for their phones. The beacon technology also enables the team to send those fans welcome messages and discount offers while they are in the arena.

The Walgreens drugstore chain said last week that it was testing beacon messaging in 10 of its Duane Reade stores in New York City.

Mittman, who lived in Bergenfield as a child, said beacon technology, if used the right way, can create "a valuable ongoing dialogue with the shopper." If done properly, it allows retailers to take the best things about the digital world — instant access to discounts and websites that remember what you ordered in the past and suggest new purchases — and apply them to brick-and-mortar stores, he said.

If it's used the wrong way, he said — for example, if shoppers find their phones pinging with messages every three feet as they walk through a store — customers will turn off the app.

"When you look at the retailer apps out there, how many of them actually provide value?" Mittman asked. "Very, very few."

Beacon technology eventually may be used to speed payments, said Denee Carrington, senior analyst at Forrester Research, who spoke about mobile payments at the conference.

Carrington said a consortium of U.S. retailers, led by Wal-Mart and Target, is working on developing a mobile wallet that will let consumers pay using their phones.

The major credit card companies see such mobile wallets as a threat, and are working to develop their own mobile payment options.

Tyler Thoreson, a vice president at online fashion retailer Gilt, said more than 40 percent of the company's sales come from mobile customers. The customer who buys via mobile device "is a very-high income customer," Thoreson said, adding that Gilt sold a $28,000 vintage watch via mobile device.